Russia holds court at its own Davos

Billed locally as Russia’s Davos, this year’s St Petersburg International Economic Forum surely lived up to the name. Chinese Premier
Hu Jintao
shared the opening ceremony with his Russian counterpart,
Dmitry Medvedev
, and a bevy of other presidents and kings of business and finance were there, all courting Russia’s growing power as holder of the largest gas reserves in the world and some of its biggest oilfields.

While Britain and other Western nations are struggling with the downsides of soaring energy prices, Russia is soaking in cash. Gross domestic product increased by 4 per cent last year and is expected to expand even faster this year. Advertising levels have more than doubled over the last 12 months while car sales have soared by 25 per cent to almost 2 million vehicles a year.

Mr Hu showered what he described as China’s “friendly neighbour and strategic partner" with praise for its work in modernising its economy and raising living standards. He said the two sides had agreed at earlier discussions in Moscow to raise bilateral trade to $US100 billion ($95 billion) by 2015 and $US200 billion by 2020.

There were promises to share nuclear power expertise and co-operate in “green emerging industries" as well as finance and science.

Mr Hu’s more particular mission was to tie Russia to a 30-year gas supply deal that could be worth up to $US1 trillion, to help power Beijing’s booming economy and allow Moscow to diversify its exports away from Europe. Russia reportedly showed its strength by refusing to bow to demands that prices be cut, so a deal has yet to be sealed.

Later, it was industry’s turn to tip the cap to Russia. BP’s Bob Dudley, Shell’s Peter Voser and ExxonMobil’s Neil Duffin were among dozens of global energy bosses keen to discuss co-operation with Mr Medvedev.